Vietnam’s rapidly growing consumer market presents a great opportunity for foreign brands to expand their presence in Southeast Asia. However, navigating the complex Vietnamese market can be challenging for foreign businesses. To successfully sell products in Vietnam, foreign brands can consider different channels, including e-commerce platforms, local distributors, direct retail shops, franchising, exporting, and trade shows. Each of these channels has its own advantages and challenges, and foreign brands should carefully consider their options based on their target market, product offerings, and business goals. In this article, we introduce the top 5 ways to help international brands sell their products easily in Vietnam.
E-commerce has become one of the most popular and effective ways to sell products in Vietnam, thanks to the growing number of internet users and the increasing preference for online shopping. E-commerce allows businesses to reach a wider audience and increase sales by setting up an online store or partnering with existing platforms such as Lazada or Shopee.
According to a report by iPrice Group, Lazada was the top e-commerce platform in Vietnam in 2021, with more than 300 million users, and the number is expected to grow as more people shift to online shopping. Meanwhile, in the same year, Shopee is the most downloaded shopping app in Vietnam, with over 43 million downloads and over 300,000 active sellers on its platform, offering a wide range of products across various categories, including electronics, fashion, beauty, and home and living. That’s why many businesses, both domestic and foreign, have leveraged this platform to sell their products to Vietnamese consumers.
There are numerous ways in which businesses can leverage popular e-commerce platforms in Vietnam
- Online storefront: These platforms allow businesses to set up an online storefront where they can showcase their products or services to millions of potential customers. Businesses can create a professional-looking store with their branding, product descriptions, images, and prices.
- Customer acquisition: E-commerce platforms like Shopee or Lazada have millions of registered users who are actively looking for products to buy. By listing their products on these platforms, businesses can tap into a massive customer base and acquire new customers.
- Marketing: These platforms offer various marketing tools to help businesses promote their products to potential customers. They can use features like sponsored listings, ads, and discounts to increase their visibility and attract more customers. Besides, it is advised that brands should launch marketing campaigns featuring influencers/KOLs to further promote their presence on the e-commerce world.
Learn more about the growing e-commerce industry in Vietnam:
2. Local Distributors
It is an undeniable fact that distributors can help businesses sell their products by utilizing their established networks and relationships with retailers. This method can be especially effective for businesses that are looking to expand their reach beyond the current market.
One outstanding example of selling through distributors is Kao Vietnam, a subsidiary of the Japanese consumer goods company Kao Corporation. This brand has been really successful in Vietnam by partnering with distributors to sell its products. The company has a strong presence in the country’s beauty and personal care market, thanks in part to its partnerships with local distributors. Another instance is Imex Pan Pacific Group (or IPPG) – one of the largest distributors of Nike products in Vietnam. They have been a Nike partner since 1995 and are responsible for distributing Nike products to retailers throughout Vietnam.
So, how can international businesses work with distributors to sell their products? Let’s dive into these 3 important ways:
- Tap into their network: Local distributors have an established network of contacts and relationships with key stakeholders in the industry. Foreign businesses can leverage these connections to gain access to potential customers, suppliers, and other relevant parties.
- Benefit from their marketing expertise: Local distributors are well-versed in local marketing channels and can help foreign businesses navigate the complex marketing landscape. They can also provide valuable insights on local advertising regulations and help foreign businesses avoid costly mistakes.
- Take advantage of their logistics and distribution capabilities: Local distributors have the necessary infrastructure and logistics in place to distribute products efficiently across the local market. Foreign businesses can leverage these capabilities to ensure timely delivery and reduce logistics costs.
3. Direct Shop
Direct retail shops are a good way to sell products in Vietnam, as they allow businesses to showcase their products and interact directly with customers. This method can be especially effective for selling high-end or luxury goods.
Zara or H&M are vivid examples of fashion retail brands that have several stores in Vietnam. Most of them are located in the biggest Vincom Center in Hanoi and Ho Chi Minh city. The stores offer a range of products, including apparel, accessories, and shoewear.
However, before opening their own direct retail shops in Vietnam, foreign brands should conduct market research to identify the most popular products and consumer trends in Vietnam and tailor their product offerings to meet the needs and preferences of local customers.
Below are some suggested steps to help foreign brands build their own direct shops in Vietnam:
- Find a suitable location: Foreign brands should conduct market research to identify the best location for their direct shop, taking into account factors such as foot traffic, accessibility, and local competition.
- Hire and train staff: Foreign brands should hire and train staff who are knowledgeable about their products and can provide quality customer service in Vietnamese.
- Set up shop: Once the location is secured and staff is hired, foreign brands can set up their direct shop, including setting up displays, installing equipment, and arranging inventory.
- Develop a marketing strategy: To attract customers to their direct shop, foreign brands should develop a marketing strategy that includes advertising, promotions, and other tactics to build brand awareness and attract customers.
- Monitor and evaluate performance: After the direct shop is up and running, foreign brands should monitor and evaluate its performance, including sales, customer feedback, and other metrics. This will help them make adjustments and improvements to optimize their operations.
4. Direct Sales
Direct sales involve sending sales representatives directly to potential customers to promote and sell products. This method can be effective for businesses with highly specialized or niche products.
A good example of this approach is Herbalife, a global nutrition company that has a solid presence in Vietnam through its direct selling model. The company’s representatives promote and sell its products directly to consumers, often through social networks.
Direct sales can be an effective method for foreign businesses to sell their products in Vietnam. To implement this strategy, brands can follow the steps below:
- Research the market: Before starting any sales activity, it is essential to understand the market in Vietnam. This involves researching the competition, local laws and regulations, cultural differences, and consumer preferences. This information can help you tailor your sales strategy to suit the market and increase your chances of success.
- Identify potential customers: Once you have a good understanding of the market, you can start identifying potential customers. This involves creating a target customer profile and using various channels to reach out to them, such as social media, email marketing, and networking events.
- Establish a local presence: It is essential to establish a local presence in Vietnam to build trust with potential customers. This can be done by setting up an office, hiring local staff, and participating in local events and exhibitions.
- Provide excellent customer service: In Vietnam, customer service is crucial. By providing excellent customer service, you can build a loyal customer base and increase the likelihood of repeat business.
- Use local language and culture: To succeed in Vietnam, it is essential to understand and respect the local language and culture. This involves using the local language in your sales and marketing materials and adapting your sales pitch to suit the local culture.
5. B2B via agents
Businesses selling products to other businesses can benefit from partnering with agents, who have established relationships with potential customers. This approach involves partnering with local agents who have the necessary knowledge, experience, and network to represent foreign businesses and sell their products in Vietnam. It can be especially effective for businesses selling industrial or technical products.
Specifically, a foreign business can hire an agent in Vietnam to handle manufacturing and production operations. The agent can help with finding suitable factories, overseeing production processes, and ensuring quality control. Or when it comes to importation/exportation, an agent can assist foreign businesses in Vietnam with customs procedures, logistics, and transportation.
To apply this strategy, brands can start with these steps:
- Identify potential agents: The first step in this approach is to identify potential agents in Vietnam who have a good understanding of the market and the industry in which the foreign business operates. This can be done through networking, market research, or by hiring a local consultant.
- Evaluate the agents: Once potential agents are identified, it is important to evaluate them based on their experience, reputation, and network. This can be done by conducting interviews, checking references, and reviewing their track record in the industry.
- Establish a partnership agreement: After selecting an agent, it is important to establish a partnership agreement that outlines the terms of the relationship, such as the scope of work, compensation, and performance metrics. This agreement should also include provisions for intellectual property protection, quality control, and dispute resolution.
- Provide product training and support: To ensure that the agent can effectively represent the foreign business and sell their products, it is important to provide them with product training and ongoing support. This can involve providing technical manuals, marketing materials, and regular communication and feedback.
Overall, these five methods offer businesses in Vietnam a range of options for selling their products, depending on their target market and product offerings. By leveraging these methods and analyzing marketing data and trends, businesses can improve their sales and gain a competitive advantage in the Vietnamese market. However, it is important to note that Vietnam has specific regulations and requirements for foreign businesses to operate in the country, including obtaining the necessary licenses and permits, registering with the relevant authorities, and complying with local laws and regulations. Therefore, foreign companies should consult with local agencies and legal advisors to ensure that they comply with all the necessary requirements to operate successfully in Vietnam.